The central bank of Nigeria explains ban on ATM card abroad

The Central Bank of Nigeria, CBN, has explained
that the decision of Deposit Money Banks to place
a restriction on the use of Automated Teller
Machine (ATM) cards abroad by bank customers,
is as a result of scarcity of foreign exchange.
The apex bank said while it had no powers to
reverse the restriction placed by the DMBs on the
use of the ATMs abroad, it was in support of the
decision as it would assist in reducing the
pressure on the naira.
The Director, Monetary Policy Department, CBN,
Mr. Moses Tule, who stated these in Abuja while
speaking with journalists Monday, noted that the
restriction might continue until the country could
increase its forex earnings.
He said if banks had not taken the decision to
restrict the use of the ATM cards abroad, some of
them would currently be experiencing challenges
meeting the overseas demand of their customers.
This, Tule added, would have caused huge
liabilities in the balance sheet of the banks, thus
affecting their operations.
He, however, said much as the CBN sympathised
with Nigerians for the sufferings they were
experiencing in carrying out transactions abroad,
there was little the apex bank could do to reverse
the decision of the banks.
He said, “The limitation on the use of debit or
credit cards outside the country was not a
limitation that was placed by the CBN.
“They were restrictions that Deposit Money Banks
placed because they have to settle whatever
transactions you make with your debit cards with
their corresponding banks in foreign currency. And
if the banks do not have the foreign currency to do
that, then you create a liability problem for them”.
He said, going forward, the priority of the CBN
would be to use the foreign exchange to settle
matured Letters of Credit that had been opened
for importation of petroleum products and other
raw materials.
“Given the level of current flow into the reserves,
by the time we meet these priority areas, you will
discover that people who are using their debit
cards overseas for shopping can never be on the
priority list”, he added.